James Murdoch, as quite widely expected, has stepped down as chairman of BSkyB, the UK’s largest pay TV operator in which News Corp established by his father Rupert has a 39-percent stake.
Murdoch, himself, said this was to avoid him being a lightning rod for the flak hitting the related News International, owner of UK newspapers including the former News of The World embroiled in the phone hacking scandal. Murdoch junior ran the News of the World when the scandal broke in July 2011, with the finding that numerous celebrities, politicians and others in the public eye had had their phones hacked by reporters of that newspaper chasing stories.
This has led to an ongoing enquiry that has broadened its attention to the whole of the UK Press but also turned its the spotlight on the influence News International has wielded over UK politicians and governments for almost 30 years, starting with Prime Minister Margaret Thatcher. This is in contrast to some other European countries such as Italy, where it is government that has been accused of having too much influence over the media.
BSkyB was not directly implicated in the phone-hacking scandal, but being effectively part of the same stable and having James Murdoch as chairman while running News of the World, has still been affected. First, the scandal effectively blocked the attempt by News Corp’s bid in 2011 to purchase the remaining shares in BSkyB it did not already own. Then it led to the UK communications regulator Ofcom in March 2012 appointing a team to investigate whether BSkyB should maintain its status as being “fit and proper to hold a UK broadcast license.”
On the face of it, this investigation seemed to have little justification, since BSkyB’s main crime had been to be a successful and ruthless competitor, but it was tainted by association with the phone-hacking scandal. Both James Murdoch and father Rupert believe that his resignation as chairman of BSkyB will take the sting out of the Ofcom investigation, which indeed is now quite likely to fade away.